Wednesday, January 16, 2013

There are no shortage of startups playing in the food ordering space. Nationally there’s Seamless, GrubHub, and Eat 24, while regional players like LABite challenge on a market by market basis. They problem with most of these solutions, from the restaurant’s perspective, is that they stand as a middleman between the business and its customers. Los Angeles’ ChowNow offers an alternative, by way of a SaaS solution that includes a custom mobile app, as well as Facebook and mobile Web ordering, and allows restaurants to offer their consumers a branded experience at all times.

“The vast majority of to-go orders come from repeat, loyal customers,” says ChowNow founder and CEO Chris Webb. “It’s not logical to pay 15 percent to a portal (e.g. GrubHub, etc.) if someone was going to order from the restaurant anyway. If a restaurant sends a customer to a portal, it would be like Delta sending a customer to Kayak or Priceline to buy tickets.”

Today, ChowNow is announcing $3 million in Series A funding, led by returning investor GRP Partners, with participation from Daher Capital, Double M Capital, Karlin Ventures, and Velos Partners. The company previously raised a $1 million seed round following its graduation from Santa Monica’s Launchpad LA accelerator.

ChowNow has been growing rapidly since launching in May, despite its lack of an inside or outside sales team. Word of mouth within the small community of restaurateurs, has allowed the company to onboard “hundreds of restaurants” in 44 states, including large chains like CiCi’s Pizza and Ground Round, and smaller independent restaurants. Recently the company has expanded beyond traditional restaurants to work with several ski resorts, gym smoothie bars, and food trucks – each which has a unique need for mobile ordering. At its current pace, Webb anticipates signing up another 1,000 restaurants in the first six months of 2013.

The good thing about ChowNow’s approach, is that it doesn’t need critical mass in any particular location to be valuable to a restaurant or a consumer.